Share and Unit-based Plans:

The Company has established share and unit-based compensation plans for the purpose of attracting and retaining executive officers, directors and key employees.

2003 Equity Incentive Plan:

The 2003 Equity Incentive Plan ("2003 Plan") authorizes the grant of stock awards, stock options, stock appreciation rights, stock units, stock bonuses, performance-based awards, dividend equivalent rights and OP Units or other convertible or exchangeable units. As of December 31, 2015, stock awards, stock units, LTIP Units (as defined below), stock appreciation rights ("SARs") and stock options have been granted under the 2003 Plan. All stock options or other rights to acquire common stock granted under the 2003 Plan have a term of 10 years or less. These awards were generally granted based on the performance of the Company and the employees. None of the awards have performance requirements other than a service condition of continued employment unless otherwise provided. All awards are subject to restrictions determined by the Company's compensation committee. The aggregate number of shares of common stock that may be issued under the 2003 Plan is 13,825,428 shares. As of December 31, 2015, there were 2,285,318 shares available for issuance under the 2003 Plan.

Stock Awards:

The value of the stock awards was determined by the market price of the Company's common stock on the date of the grant. The following table summarizes the activity of non-vested stock awards during the years ended December 31, 2015, 2014 and 2013:



	2015				2014				2013
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Balance at beginning of year	9,189		$	59.25	19,001		$	56.77	20,924		$	49.36
Granted	—		—		—		—		8,963		61.84
Vested	(7,577	)	58.67		(9,812	)	54.45		(10,886	)	46.70
Balance at end of year	1,612		$	62.01	9,189		$	59.25	19,001		$	56.77

Stock Units:

The stock units represent the right to receive upon vesting one share of the Company's common stock for one stock unit. The value of the stock units was determined by the market price of the Company's common stock on the date of the grant. The following table summarizes the activity of non-vested stock units during the years ended December 31, 2015, 2014 and 2013:



	2015				2014				2013
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	144,374		$	59.94	137,318		$	57.24	114,677		$	52.19
Granted	77,282		86.53		75,309		60.50		67,920		62.01
Vested	(86,761	)	61.29		(68,253	)	55.14		(45,279	)	51.59
Forfeited	(2,809	)	86.72		—		—		—		—
Balance at end of year	132,086		$	74.58	144,374		$	59.94	137,318		$	57.24

SARs:

The executives have up to 10 years from the grant date to exercise the SARs. Upon exercise, the executives will receive unrestricted common shares for the appreciation in value of the SARs from the grant date to the exercise date.

The Company determined the value of each SAR awarded during the year ended December 31, 2012 to be $9.67 using the Black‑Scholes Option Pricing Model based upon the following assumptions: volatility of 25.85%, dividend yield of 3.69%, risk free rate of 1.20%, current value of $59.57 and an expected term of 8 years. The value of each of the other outstanding SARs was determined at the grant date to be $7.68 based upon the following assumptions: volatility of 22.52%, dividend yield of 5.23%, risk free rate of 3.15%, current value of $61.17 and an expected term of 8 years. The assumptions for volatility and dividend yield were based on the Company's historical experience as a publicly traded company, the current value was based on the closing price on the date of grant and the risk free rate was based upon the interest rate of the 10-year Treasury bond on the date of grant.

In connection with the payment of the Special Dividend of $2.00 per share of common stock on December 8, 2015 (See Note 12—Stockholders' Equity), the compensation committee approved an adjustment to all outstanding SARs. The exercise price and number of outstanding SARs were adjusted such that each SAR had the same fair value to the holder before and after giving effect to the payment of the special dividend. As a result, the 407,823 outstanding SARs with a weighted-average price of $56.49 were adjusted to 417,783 outstanding SARs with a weighted average price of $55.13.

The following table summarizes the activity of SARs awards during the years ended December 31, 2015, 2014 and 2013:



	2015				2014				2013
	Units		Weighted Average Exercise Price		Units		Weighted Average Exercise Price		Units		Weighted Average Exercise Price
Balance at beginning of year	772,639		$	56.67	1,070,991		$	56.66	1,164,185		$	56.66
Granted	—		—		—		—		—		—
Exercised	(364,807	)	56.86		(298,352	)	56.63		(93,194	)	56.63
Special dividend adjustment	9,951		55.13		—		—		—		—
Balance at end of year	417,783		$	55.13	772,639		$	56.67	1,070,991		$	56.66

Long-Term Incentive Plan Units:

Under the Long-Term Incentive Plan ("LTIP"), each award recipient is issued a form of operating partnership units ("LTIP Units") in the Operating Partnership. Upon the occurrence of specified events and subject to the satisfaction of applicable vesting conditions, LTIP Units (after conversion into OP Units) are ultimately redeemable for common stock of the Company, or cash at the Company's option, on a one-unit for one-share basis. LTIP Units receive cash dividends based on the dividend amount paid on the common stock of the Company. The LTIP may include both market-indexed awards and service-based awards.

The market-indexed LTIP Units vest over the service period of the award based on the percentile ranking of the Company in terms of total return to stockholders (the "Total Return") per common stock share relative to the Total Return of a group of peer REITs, as measured at the end of the measurement period.

The fair value of the market-indexed LTIP Units are estimated on the date of grant using a Monte Carlo Simulation model. The stock price of the Company, along with the stock prices of the group of peer REITs (for market-indexed awards), is assumed to follow the Multivariate Geometric Brownian Motion Process. Multivariate Geometric Brownian Motion is a common assumption when modeling in financial markets, as it allows the modeled quantity (in this case, the stock price) to vary randomly from its current value and take any value greater than zero. The volatilities of the returns on the share price of the Company and the peer group REITs were estimated based on a look-back period. The expected growth rate of the stock prices over the "derived service period" is determined with consideration of the risk free rate as of the grant date.

On February 15, 2013, the Company granted 332,189 market-indexed LTIP Units ("2013 LTIP Units") at a grant date fair value of $66.58 per LTIP Unit that vested over a service period ending December 31, 2013. On January 16, 2014, the compensation committee determined that the 2013 LTIP Units had vested at the 96% level, based on the Company's percentile ranking in terms of Total Return per common stock share compared to the Total Return of a group of peer REITs during the period of January 1, 2013 to December 31, 2013. As a result, 318,900 LTIP Units vested and 13,289 LTIP Units were forfeited as of December 31, 2013.

On January 1, 2014, the Company granted 70,042 LTIP Units with a grant date fair value of $58.89 that will vest in equal annual installments over a service period ending December 31, 2016. Concurrently, the Company granted 272,930 market-indexed LTIP Units ("2014 LTIP Units") at a grant date fair value of $45.34 per LTIP Unit that vested over a service period ending December 31, 2014. The 2014 LTIP Units were equally divided between two types of awards. The terms of both types of awards were the same, except one award had an additional 3% absolute Total Return requirement, which if it was not met, then such LTIP Units would not have vested. On January 12, 2015, the compensation committee determined that the 2014 LTIP Units had vested at a 150% level, based on the Company's percentile ranking in terms of Total Return per common stock share compared to the Total Return of a group of peer REITs during the period of January 1, 2014 to December 31, 2014. In addition, the compensation committee determined that the applicable 3% absolute Total Return requirement was exceeded. As a result, an additional 136,465 fully-vested LTIP Units were granted on December 31, 2014.

On March 7, 2014, the Company granted 246,471 LTIP Units at a fair value of $60.25 per LTIP Unit that were fully vested on the grant date.

On January 1, 2015, the Company granted 49,451 LTIP Units with a grant date fair value of $83.41 per LTIP Unit that will vest in equal annual installments over a service period ending December 31, 2017. Concurrently, the Company granted 186,450 market-indexed LTIP Units ("2015 LTIP Units") at a grant date fair value of $66.37 per LTIP Unit that vested over a service period ending December 31, 2015. The 2015 LTIP Units were equally divided between two types of awards. The terms of both types of awards were the same, except one award has an additional 3% absolute total stockholder return requirement, which if it is not met, then such LTIP Units will not vest. The grant date fair value of the 2015 LTIP Units assumed a risk free interest rate of 0.25% and an expected volatility of 16.81%. On January 7, 2016, the compensation committee determined that the 2015 LTIP Units had vested at a 130% level, based on the Company's percentile ranking in terms of Total Return per common stock share compared to the Total Return of a group of peer REITs during the period of January 1, 2015 to December 31, 2015. In addition, the compensation committee determined that the applicable 3% absolute Total Return requirement was exceeded. As a result, an additional 55,934 fully-vested LTIP Units were granted on December 31, 2015.

On March 6, 2015, the Company granted 132,607 LTIP Units at a fair value of $86.72 per LTIP Unit that were fully vested on the grant date.

The following table summarizes the activity of the non-vested LTIP Units during the years ended December 31, 2015, 2014 and 2013:



	2015				2014				2013
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	46,695		$	58.89	—		$	—	200,000		$	38.63
Granted	424,442		74.71		725,908		51.71		332,189		66.58
Vested	(414,822	)	73.13		(679,213	)	51.22		(518,900	)	55.81
Forfeited	—		—		—		—		(13,289	)	66.58
Balance at end of year	56,315		$	73.24	46,695		$	58.89	—		$	—

Stock Options:

The Company measured the value of each option awarded during the year ended December 31, 2012 to be $9.67 using the Black-Scholes Option Pricing Model based upon the following assumptions: volatility of 25.85%, dividend yield of 3.69%, risk free rate of 1.20%, current value of $59.57 and an expected term of 8 years. The assumptions for volatility and dividend yield were based on the Company's historical experience as a publicly traded company, the current value was based on the closing price on the date of grant and the risk free rate was based upon the interest rate of the 10-year Treasury bond on the date of grant.

In connection with the payment of the Special Dividend of $2.00 per share of common stock on December 8, 2015 (See Note 12—Stockholders' Equity), the compensation committee approved an adjustment to all outstanding stock options. The exercise price and number of outstanding stock options were adjusted such that each stock option had the same fair value to the holder before and after giving effect to the payment of the special dividend. As a result, the 10,068 outstanding stock options with a weighted-average price of $59.57 were adjusted to 10,314 outstanding stock options with a weighted average price of $58.15.

The following table summarizes the activity of stock options for the years ended December 31, 2015, 2014 and 2013:



	2015			2014			2013
	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options		Weighted Average Exercise Price
Balance at beginning of year	10,068	$	59.57	10,068	$	59.57	12,768		$	54.69
Granted	—	—		—	—		—		—
Exercised	—	—		—	—		(2,700	)	36.51
Special dividend adjustment	246	58.15		—	—		—		—
Balance at end of year	10,314	$	58.15	10,068	$	59.57	10,068		$	59.57

Directors' Phantom Stock Plan:

The Directors' Phantom Stock Plan offers non-employee members of the board of directors ("Directors") the opportunity to defer their cash compensation and to receive that compensation in common stock rather than in cash after termination of service or a predetermined period. Compensation generally includes the annual retainers payable by the Company to the Directors. Deferred amounts are generally credited as units of phantom stock at the beginning of each three-year deferral period by dividing the present value of the deferred compensation by the average fair market value of the Company's common stock at the date of award. Compensation expense related to the phantom stock awards was determined by the amortization of the value of the stock units on a straight-line basis over the applicable service period. The stock units (including dividend equivalents) vest as the Directors' services (to which the fees relate) are rendered. Vested phantom stock units are ultimately paid out in common stock on a one-unit for one-share basis. To the extent elected by a Director, stock units receive dividend equivalents in the form of additional stock units based on the dividend amount paid on the common stock. The aggregate number of phantom stock units that may be granted under the Directors' Phantom Stock Plan is 500,000. As of December 31, 2015, there were 199,603 stock units available for grant under the Directors' Phantom Stock Plan.

The following table summarizes the activity of the non-vested phantom stock units for the years ended December 31, 2015, 2014 and 2013:



	2015				2014				2013
	Stock Units		Weighted Average Grant Date Fair Value		Stock Units		Weighted Average Grant Date Fair Value		Stock Units		Weighted Average Grant Date Fair Value
Balance at beginning of year	9,269		$	58.35	17,575		$	58.66	—		$	—
Granted	13,351		78.72		10,747		65.54		34,266		59.04
Vested	(20,162	)	72.17		(19,053	)	62.69		(16,691	)	59.44
Forfeited	(2,458	)	55.62		—		—		—		—
Balance at end of year	—		$	—	9,269		$	58.35	17,575		$	58.66

Employee Stock Purchase Plan ("ESPP"):

The ESPP authorizes eligible employees to purchase the Company's common stock through voluntary payroll deductions made during periodic offering periods. Under the ESPP common stock is purchased at a 15% discount from the lesser of the fair value of common stock at the beginning and end of the offering period. A maximum of 750,000 shares of common stock is available for purchase under the ESPP. The number of shares available for future purchase under the plan at December 31, 2015 was 517,285.

Compensation:

The following summarizes the compensation cost under the share and unit-based plans for the years ended December 31, 2015, 2014 and 2013:



	2015		2014		2013
Stock awards	$	252	$	365	$	497
Stock units	6,041		4,689		3,839
LTIP units	26,622		28,598		22,778
Stock options	16		16		16
Phantom stock units	1,444		1,205		992
	$	34,375	$	34,873	$	28,122

The Company capitalized share and unit-based compensation costs of $6,008, $5,410 and $3,915 for the years ended December 31, 2015, 2014 and 2013, respectively.

The fair value of the stock awards and stock units that vested during the years ended December 31, 2015, 2014 and 2013 was $8,794, $4,685 and $3,516, respectively. Unrecognized compensation costs of share and unit-based plans at December 31, 2015 consisted of $4,128 from LTIP Units, $20 from stock awards, $3,488 from stock units and $27 from stock options.